So you want to start a business? You've researched the market, figured out potential cash flow and identified your competitors. Now all you need is start-up capital. As anyone who's already tried knows, it's not quite that simple. In fact, finding the money to go from an idea to an actual business can be one of the most difficult hurdles entrepreneurs face.

This is particularly true if you've used up, or just can't access, traditional seed-financing sources: personal savings, friends or family, credit cards or personal loans from banks or other financial institutions. So what's left? Surprisingly, quite a few options, depending on who and where you are and what type of business you're starting. Here are four sources to get you going.

1. Business Plan Competitions

Does anyone offer "free money" to start a business?
Business-plan competitions come pretty close, typically featuring
small pots of money, up to $50,000.

University-sponsored contests are popping up all over the
country, with participants required to be current students, recent
graduates or business-founding teams that include at least one
university student. Winners of local university competitions also
sometimes go on to national (and international) ones. For example,
teams from around the world competed at the Moot Corp International
Business Plan Competition at the University of Texas, Austin,
described as "the granddaddy of business competitions."
This year's contest featured 26 teams, including one each from
licensed Moot Corp competitions in Africa, Asia, Australia and
Canada. Contestants competed for a first-place prize of $15,000.
Hewlett Packard also offered $100,000 in goods and services to one
lucky team that agreed to launch an Internet company.

A number of municipalities have jumped on the
business-plan-competition bandwagon to stimulate economic
development. Probably the oldest such contest is sponsored by the
Eau Claire Area Industrial Development Corp. in Wisconsin. Since
1986, the agency has invested $29,500 in companies.

Others who have followed the Eau Claire example include
Amarillo, Texas; Carbondale, Illinois; Haverhill,
Massachusetts' Cyber District; and Pittsburgh.

Hot Opportunities

Competitions associated with universities typically require that
at least one member of the founding team be a current student or
alumnus of the school.

The Hummer
Winblad February Madness Start-Up contest is open to individual
or business teams where the founding management team is currently
enrolled in a post-secondary college or university. The first-place
winner will receive an offer of funding from Hummer Winblad. (415)
979-9600. (Lisa Anderson)

Babson
College holds several competitions. The Douglass Foundation
Entrepreneurial Prizes, for one, offers graduate students a total
of $10,000 in awards ($6,000 to the winner, $3,000 for second place
and $1,000 for third place). The John H. Muller Jr. Business Plan
Prize Competition awards $5,000 to an undergraduate.

Indiana University conducts three competitions: The Indiana
University Spirit of Enterprise Undergrad Business Plan
Competition; the MBA Business Plan Competition, organized by the
Kelley School of Business; and the invitation-only Indiana
University Spirit of Enterprise MBA Business Plan Competition. The
latter contest features the winning teams of local contests at nine
Midwestern schools.

Enterprise Creation Competition sponsored by Ball
State University in Muncie, Indiana, and Miami University in
Oxford, Ohio offers more than $12,000 in cash prizes to teams of
undergraduates from universities around the nation.

The inaugural Duke University Startup Challenge in 1999,
operated in three phases, offered the winning team a $30,000 first
prize. Teams must consist of at least one current Duke student, and
mixers are held during the preliminary stages of the competition to
facilitate team formation. For more information, call: (919)
660-7700.

Howard University holds a business-plan contest for students
offering a cash prize during its annual Black is Business Week
program. Applications are available in the fall. Call Dr. Saunders
for details: (202) 806-1533.

NASDAQ/SDSU International Student Business Plan Competition
sponsored by San Diego State University, Entrepreneurial Management
Center. Open to faculty-sponsored full and part-time graduate
and/or undergraduate students currently enrolled. (619)
594-2781.

2. Grants

This is probably the most talked about and least understood
source of business financing. For the record, there are no general
small-business start-up grants. But you can find grants tailored
for specific needs.

The largest of these are two programs operated by the federal
government: the Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) programs.

Obtaining an SBIR requires strategy, says Chris Berka, CEO and
co-founder of Advance Brain Monitoring. "It's very
important that your idea fit some framework of one of the
government agencies [participating in the SBIR program]. At first,
[our applications] didn't interest any agency," explains
Berka, whose Carlsbad, California, firm won three grants after a
couple tries. Their first success: a $100,000 award to create and
demonstrate a prototype of a baseball-cap-style
alertness-monitoring device.

Entrepreneurs nationwide can apply for SBIR/STTR grants from any
of the 10 federal agencies involved in the program. Phase One
grants money for finance development and testing of a prototype;
after the prototype is completed, companies can seek Phase Two
grants in amounts of up to $750,000 to start them on the road to
commercialization.

"A lot of people get Phase One grants, but Phase Two is
extremely competitive," says Berka. "We went through
several rewrites and finally figured out the formula." Thanks
to these grants, Berka and her co-founders, Daniel Levendowski and
Zoran Konstantinovic, should have their product ready for the
market by 2001.

Only two of the 10 agencies--the National Science Foundation and
the National Institutes of Health--actually use a grant system to
award money. The others use either the Federal Acquisition
Requirement (FAR) process or federal contracting.

"These grants are not giveaways," stresses Arthur
Collins, acting assistant administrator for technology in the
SBA's Office of Technology. "It's a competitive
process in response to specific agency needs. Each agency will put
topics out there that meet mission needs and lend themselves to
commercialization."

According to Collins, the difference between the programs is
that, while SBIRs focus on funding new technologies, STTRs require
a nonprofit research organization and a business to jointly focus
on technology transfer. Organizations around the country help
entrepreneurs apply for these awards. To learn more about the
program, visit www.sba.gov/sbir.

The Inventions and Innovation Grant is another government
program operated by the Department of Energy Office of Energy
Efficiency and Renewable Energy. Its goal: to encourage development
and adoption of renewable energy and energy efficiency. Inventors
and small technology-based companies can review solicitations
issued annually that spell out what the agency is seeking and
include instructions for completing proposals. Up for the taking
are grants of up to $40,000 to fund development, or of up to
$200,000 in prototype development or commercialization grants.

The National Institute of Standards and Technology, through its
Advanced Technology Program, can award a single company up to $2
million over a period of up to three years for research and
development. The program invests in cutting-edge technologies that
promise significant commercial payoffs and widespread national
benefits. For details on past winners and applications for the next
competition, call (800) 287-3863 or visit www.atp.nist.gov. A
number of states and cities have their own targeted grants. For
example, the Illinois Recycling Grant Program encourages private
organizations to apply for grants that promote diverting recyclable
commodities. North
Carolina's Division of Pollution Prevention and Environmental
Assistance offers several grants, including up to $20,000 in
matching funds to develop and implement projects that eliminate,
prevent and/or reduce solid waste.

In the Savannah River Region of South Carolina and Georgia,
entrepreneurs starting tech-based or manufacturing companies can
apply for several grants. The Small Business Seed Fund for
Technical Innovations offers two-year loans of up to $50,000 to
support startups or business expansions offering new products or
improvements of old ones. Those who successfully complete this
grant can apply for a two-year grant of up to $250,000 from the
Challenge Fund Program for Technology Development.

These are just a few of the grants available. To find others
takes persistence as well as some creative and strategic thinking.
Start by finding the government office that handles business or
economic development; then ask for more information.

Hot Opportunities

Thornton, Colorado, has a promotional and facade Improvement
grant for companies located in the Urban Renewal Zone. For details,
call (303) 538-7358.

Low-income residents of California, Connecticut, Iowa, Maine,
New Jersey, New York, Pennsylvania and Vermont can apply for grants
of up to $700 in two phases to start a business through the Trickle
Up Program. This national effort operates in conjunction with local
partners. For the nearest Trickle Up Program, call (212)
362-7958.

Pennsylvania's Alternative Fuels Incentive Grant Programs will cover
up to 30 percent of the cost associated with field testing and
evaluating new and innovative alternative-fuel technologies.
Applications are available beginning in August. For details, call
(717) 783-9242.

The Energy Innovations Small Grant in California provides up to
$75,000 to small businesses, small nonprofits, individuals and
academic institutions researching the feasibility of new and
innovative concepts. For details, contact the California Energy
Commission at (619) 594-1049 or visit here.

Minnesota offers a number of environmental assistance grants
for startups with relevant innovative technologies related to
pollution prevention, recycling market development, environmental
education, sustainable communities development and/or resource
recovery. These are one-to-one matching grants (match can be cash
or in-kind). For details, call the state's Office of
Environmental Assistance in early spring, call (800) 657-3843 or
visit here.

Iowa's Entrepreneurs With Disabilities programs provides
technical and financial assistance grants of up to $10,000 each to
qualified individuals who are active clients of the Iowa Department
of Education Division of Vocational Rehabilitation Services or the
Iowa Department for the Blind. Proceeds can be used to pay for
business-related consulting services leading to development of a
business feasibility study or business plan and for other startup
costs.

The Defense Advanced Research Projects Agency (DARPA) offers
research and development grants, contracts and innovative
agreements to individuals and small businesses that have scientific
and technological ideas related to its strategic mission. For more
information, read the Commerce Business Daily, a daily list of U.S.
government procurement invitations, contract awards and foreign
business opportunities or visit DARPA's site or call (703)
526-6630.

3. Innovation Contests

Sometimes an idea in the head is worth money in the hand,
especially if you win an invention or innovation contest. One to
consider is the Intellectual Property Owners Association award, which
provides $5,000 to one inventor each year. Nominations are
typically due in early spring and winners announced in June every
year. Eligible entries must have originated in the United States,
be covered by a U.S. patent or have been made commercially
available since the beginning of 1996.

Hot Opportunities

The Chrysler Design Award gives six $10,000 grants to winners
in the following categories: urban design, graphic design,
landscaping, architecture, new media and fashion. The competition
looks at the breadth of work of designers who have consistently
been on the cutting edge of their respective fields. A nominating
committee selects candidates. For more information, contact Vikki
Hardy at (248) 262-8700.

The Lemelson-MIT Awards offers $500,000 to an individual,
$30,000 to a student and $30,000 to a student team with a patent
that has the potential to make a significant impact on society.
This is a nomination process only. Interested individuals can
approach a relevant professional organization in the fields of
science, engineering, medicine or business as well as regional
inventors groups to secure a nomination.

4. Supplier Financing

Imagine being a woman working in the women's swimwear
industry, a field dominated by men who don't understand the
importance of creating figure-flattering swimsuits.

That situation prompted Patricia Byrnes Kane, 42, to walk away
from a business she co-owned to start It Figures. "Now I have
complete freedom to do whatever I want," says Byrnes Kane.

Her freedom came in the form of roughly $1 million in financial
backing from the manufacturer of her swimwear--Ronnie Strasser of
Phantom Industries in Toronto, Canada. Byrnes Kane had already
launched her firm when she met Strasser through a mutual friend.
"He was trying to start a swimwear company and approached me
because he was small in Canada and wanted to build his name in the
United States."

The two studied Kane's profit and loss projections before
sewing up a 50/50 partnership in which she runs It Figures in New
York City and he runs Phantom. They communicate weekly to discuss
business issues. All order fulfillment and design takes place at
the Phantom plant while merchandising and sales happen at the It
Figures offices.

Prior to signing the agreement, Kane visited the factory,
researched Strasser's reputation and even contacted his bank to
check his finances. "I wanted to make sure I hooked up with
someone with integrity and honesty," says Kane, whose past
partnerships had left her wary.

Would she have gone on without the partnership? "I probably
would have gone to another swimwear company and started up a
division there. But at the end of the day I might not have been as
happy."

For entrepreneurs like Berka and Kane, the nontraditional route
for business financing paid off. But they've also demonstrated
that finding the money is no walk in the park, so gird up your
"never say die" attitude and start knocking on doors to
find that money.

Suppliers & Demand

Jerry Oakes, a business consultant who, in 1974, owned the
international-distribution rights to mood rings and received
financing from the jewelry firm he worked for back then, offers
these tips to help you get financing from suppliers:

Be open to those business arrangements that don't always
necessarily involve an exchange of cash. Sometimes the access to a
supplier's facilities, equipment and his or her valuable
expertise can be just as valuable.

Prepare. Don't just go to your suppliers with a great idea;
go to them with a presentation detailing how your great idea can
benefit their bottom line.

If appropriate, make sure you have a patent, trademark,
copyright on file or patent pending for your product.

To show the need for your product or service, do some market
research that extends beyond your circle of friends and
family.

Go to a trade show, get orders, then go back to a potential
manufacturer and ask for financing on the strength of those
orders.

A Wish Granted

A funny thing happened to Mark Elmore on the way to getting
business counseling--the local Small Business Development Center
advised him to apply for the Amarillo Enterprise Challenge
competition. He did and won.

"I was at a crossroads with my business," explains
Elmore, 43. He had run The Pilgrim Company, which makes computer mouse pads,
part time since starting it in 1994. "I was ready to launch a
business that could support me. I felt I had a product line and
production capability to make it go."

But he didn't have the money. The Pilgrim Company was a
perfect candidate for the challenge grant, because the $50,000 in
sales Elmore was garnering at that time came primarily from outside
the Amarillo area.

When he applied in 1998, there were 16 applicants; from those,
five finalists were chosen. Taking to heart the committee's
comments on the weakness of the marketing part of his initial
proposal, Elmore took a chance and spent his precious financial
resources to implement a card-deck campaign and Internet-banner
advertising 10 days before the presentation. Its efforts generated
30 solid leads and several verbal confirmations. "I was
spending over $10,000 a year out of my own pocket on financing, and
it was a big stress on me. I felt it was time to see if this
business was going to fly or not," says Elmore.

The committee was convinced, and gave him the grant. That cash
infusion enabled Elmore to work on The Pilgrim Company full time,
do additional advertising, purchase inventory and bring in
additional help to handle sales. By 1999, sales had jumped to
$300,000; they're projected to increase to $400,000 this
year.

"Without the grant," says Elmore, "I probably
would have given up within a year."